Effect of Rainfall on Seasonals in Indian Manufacturing Production: Evidence from Sectoral Data
AbstractRecent research has shown that the seasonals in Indian manufacturing production are affected by rainfall. Since the effect of rainfall comes through agricultural production, this finding raises the question of whether the effect is through demand channel or supply channel. This paper attempts to provide a preliminary answer to this question by testing for this effect in the production in different sub-sectors within the manufacturing sector. We look at the three subsectors which have more than 10% weightage each in the index of manufacturing production: (i) food products, (ii) basic chemicals and chemical products (except products of petroleum and coal), and (iii) machinery and equipment (other than transport equipment). As almost all the estimated models show some type of misspecification, we also estimate models that allow for time-variation in this behaviour. We find evidence for effect of rainfall on overall dynamics of all three components studied, and also for significant time variation in this behaviour. Focusing on seasonal component, while estimations were not possible for the basic chemicals and chemical products, for the other two components we find evidence of significant effect of rainfall on seaosonality, indicating both the channels are significant.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 25300.
Date of creation: Sep 2010
Date of revision:
Seasonality; Manufacturing Production; Smooth Transition Autoregression;
Find related papers by JEL classification:
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
- C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models &bull Diffusion Processes
This paper has been announced in the following NEP Reports:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Dick van Dijk 1 & Birgit Strikholm & Timo Ter�svirta, 2003.
"The effects of institutional and technological change and business cycle fluctuations on seasonal patterns in quarterly industrial production series,"
Royal Economic Society, vol. 6(1), pages 79-98, 06.
- van Dijk, D.J.C. & Strikholm, B. & Terasvirta, T., 2001. "The effects of institutional and technological change and business cycle fluctiations on seasonal patterns in quarterly industrial production series," Econometric Institute Research Papers EI 2001-12, Erasmus University Rotterdam, Erasmus School of Economics (ESE), Econometric Institute.
- van Dijk, Dick & Strikholm, Birgit & Teräsvirta, Timo, 2001. "The effects of institutional and technological change and business cycle fluctuations on seasonal patterns in quarterly industrial production series," Working Paper Series in Economics and Finance 0429, Stockholm School of Economics, revised 16 May 2002.
- Pami Dua & Lokendra Kumawat, 2010.
"Modelling and Forecasting Seasonality in Indian Macroeconomic Time Series,"
- Pami Dua & Lokendra Kumawat, 2005. "Modelling and Forecasting Seasonality in Indian Macroeconomic Time Series," Working papers 136, Centre for Development Economics, Delhi School of Economics.
- Kanwar, Sunil, 2000. "Does the Dog Wag the Tail or the Tail the Dog? Cointegration of Indian Agriculture with Nonagriculture," Journal of Policy Modeling, Elsevier, vol. 22(5), pages 533-556, September.
- Stephen G. Cecchetti & Anil K. Kashyap & David W. Wilcox, 1997.
"Interactions between the seasonal and business cycles in production and inventories,"
Working Paper Series, Macroeconomic Issues
WP-97-06, Federal Reserve Bank of Chicago.
- Cecchetti, Stephen G & Kashyap, Anil K & Wilcox, David W, 1997. "Interactions between the Seasonal and Business Cycles in Production and Inventories," American Economic Review, American Economic Association, vol. 87(5), pages 884-92, December.
- Franses, Ph.H.B.F. & de Bruin, P. & van Dijk, D.J.C., 2000. "Seasonal smooth transition autoregression," Econometric Institute Research Papers EI 2000-06/A, Erasmus University Rotterdam, Erasmus School of Economics (ESE), Econometric Institute.
- Terasvirta, T & Anderson, H M, 1992. "Characterizing Nonlinearities in Business Cycles Using Smooth Transition Autoregressive Models," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 7(S), pages S119-36, Suppl. De.
- Asep Suryahadi & Daniel Suryadarma & Sudarno Sumarto & Jack Molyneaux, 2006. "Agricultural Demand Linkages and Growth Multiplier in Rural Indonesia," Development Economics Working Papers 22551, East Asian Bureau of Economic Research.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht).
If references are entirely missing, you can add them using this form.